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Did political constraints bind during transition?

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  • Orla Doyle
  • Patrick Paul Walsh

Abstract

Many theoretical models of transition are driven by the assumption that economic decision making is subject to political constraints. In this paper we test whether the 'winners' and 'losers' of economic reform influenced voting behaviour in the first five national elections in the Czech Republic. We propose that voters, taking stock of endowments from the planning era, could predict whether they would become winners or losers of transition. Using survey data we measure the degree to which regions were 'not afraid' or 'afraid' of economic reform in 1990. We define the former as potential 'winners' who should vote for pro-reform parties and the latter as potential 'losers' who should support left-wing parties. Using election results and economic indicators at the regional level, we demonstrate that there is persistence in support for pro-reform and communist parties which is driven by prospective voting based on initial conditions in 1990. We find that regional unemployment rates in 2002 are good predictors of voting patterns in 1990 and provide empirical evidence that political constraints bind during transition. Copyright (c) 2007 The Authors Journal compilation (c) 2007 The European Bank for Reconstruction and Development .

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Bibliographic Info

Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 15 (2007)
Issue (Month): (07)
Pages: 575-601

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Handle: RePEc:bla:etrans:v:15:y:2007:i::p:575-601

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References

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  1. Fidrmuc, J., 1998. "Political Support for Reforms: Economics of Voting in Transition Countries," Discussion Paper 1998-98, Tilburg University, Center for Economic Research.
  2. Valev, Neven, 2004. "No pain, no gain: market reform, unemployment, and politics in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 409-425, September.
  3. Doyle, Orla & Fidrmuc, Jan, 2004. "Voice of the Diaspora: An Analysis of Migrant Voting Behaviour," CEPR Discussion Papers 4619, C.E.P.R. Discussion Papers.
  4. Marta Orviska & Anetta Caplanova & John Hudson, 2005. "Intended electoral participation in transition countries," Economics of Governance, Springer, vol. 6(3), pages 211-228, November.
  5. Repkine, Alexandre & Walsh, Patrick Paul, 1999. "Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland, and Romania," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 730-752, December.
  6. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
  7. Warner, Andrew M., 2001. "Is Economic Reform Popular at the Polls? Russia 1995," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 448-465, September.
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Cited by:
  1. Neher, Frank, 2011. "Markets wanted: Expectation overshooting in transition," Discussion Papers 2011/1, Free University Berlin, School of Business & Economics.
  2. Frank Neher, 2013. "Markets wanted: expectation overshooting in transition economies," International Review of Economics, Springer, vol. 60(2), pages 187-219, June.

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